Residential construction in metro Kansas City posted a strong gain in October amid higher local new-home sales, favorable weather conditions and positive market fundamentals, according to statistics compiled by the Home Builders Association of Greater Kansas City (HBA). A total of 925 single-family building permits were issued in October, an 8 percent gain from last year and the third-highest total for the month on record.

October’s strong construction totals marked the highest number of permits issued in a single month since March. A total of 8,754 single-family permits have been issued so far this year, down 6 percent from last year’s record total. The metro remains on pace to top the 10,000-permit barrier for new homes for the fourth straight year.

The higher permit numbers in October followed a 10 percent jump in new-home sales during September, according to Heartland Multiple Listing Service. Higher sales combined with the recent steady pace of new-home construction left new-home inventory up just 15 percent compared to the same time last year, down from a 30 percent year-to-year comparison just three months ago. These improving market fundamentals suggest that home builders remain optimistic for a strong winter construction and spring home-buying seasons, according to HBA Executive Vice President/CEO Tim Underwood.

“The remarkably steady pace of new-home construction during the last six months clearly shows home builders remain optimistic about the prospects of homeownership in metro Kansas City,” Underwood said. “There are obviously questions about the future of mortgage rates and uncertainty over material prices, but overall consumer demand remains very strong. The challenge as always will rest with the ability to provide the right product and price mix that is demanded by the market.”

Underwood said local housing policies that recognize higher construction costs and encourage progressive forms of community development would go a long way toward minimizing the impact of record-high demand for materials, soaring fuel costs and increasing land values on new-home consumers.

“We see a real need across the metro for housing policies that recognize the changing face of the market and encourage innovation to provide the right product and price mix in our local communities,” Underwood.

Kansas City, Mo., leads the metro area in new-home construction with 1,461 single-family permits issued so far this year. Olathe ranks second with 738 permits, followed by Lee’s Summit with 678 permits and Overland Park with 522. Rounding out the top 10 are Raymore, 417 permits; Kansas City, Kan./Wyandotte County, 393; Shawnee, 358; Gardner, 351; Independence, 320; and Lenexa, 304.

The Home Builders Association of Greater Kansas City (HBA) is the voice of the housing industry and the source for housing information. Comprising more than 1,000 member companies, the HBA represents an industry that contributes more than $2.5 billion to the Kansas City economy and supports more than 36,000 jobs in the Greater Kansas City metropolitan area.